Malcolm Turnbull has pointedly refused to close off an early election option as Labor removed another obstacle to an early poll by revealing it would not hold up government supply bills introduced before the budget.

The ebb and flow of power

Election race gets tighter

The latest poll shows the Government and Labor neck and neck, with Bill Shorten gaining some ground on Malcolm Turnbull as preferred Prime Minister.

Labor's co-operation with what would be an unorthodox, but not unprecedented move by the government, would allow the Parliament to guarantee the supply of funds required to pay public servants and meet other running costs.

That, in turn, would remove the one of the last logistical hurdles to a snap dissolution of both houses for a poll just after mid-year at July 2.

Asked if Labor would allow appropriations through, also known as "supply" bills, before the budget, Labor's shadow treasurer Chris Bowen said: "Our position on supply is pretty clear since 1975 - it's not the Labor Party which has a tradition of blocking supply."

The prospect of the government running out of money to operate before a July 2 double-dissolution election - the latest practical date for such a poll under the constitution - had been regarded as a deal-breaker for that option.

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Mr Turnbull said he "expected" the election to occur in August, September, or October, but then offered this: "I am saying to you, that is what I am expecting. Obviously, there are other options available but my expectation is that the election will be held at the normal time."

Taken together, the two developments have fuelled speculation both within the government and beyond, that an election announcement either before the May 10 budget, or immediately afterwards, remains under active consideration.

As the Prime Minister weighs the options, he lost another MP on Friday, in the form of Mal Brough, the former special minister of state, suspended over Christmas and then dropped permanently earlier this month, due to his involvement in the Slipper-Ashby affair.

Among other signs that an election could be called before the full three-year term is up in September, Fairfax Media has learned that a number of prominent peak industry bodies currently warring with the government and who asked not to be named, have been extended an olive branch by their minister and by the Prime Minister's Office recently.

Chris Bowen says Labor's position on supply has been clear since 1975 and that it was not Labor which had 'a tradition of blocking supply'. Photo: Andrew Meares

The representative groups have been invited to talk about finding common ground, in a gesture interpreted as an attempt to resolve hostilities prior to an election campaign.

Also adding to the case for an early poll are fears of deteriorating discipline within Coalition ranks.

This has seen backbenchers branching out publicly on issues such as tax policy, and the Safe Schools anti-discrimination program, and it also brought reports from inside the government of tensions between Mr Turnbull and his Treasurer Scott Morrison over policy and presentation.

Insiders admit an election would "clarify" what issues are really important and "focus people on winning their own seats".

"And ... consider very carefully the impact of the words they use on young people and on their families," he counselled.

"Every single one of us is absolutely, resolutely opposing to bullying of children of any kind."

Speaking in Shanghai where he is attending a G20 Finance Minister's meeting, Mr Morrison scoffed at reports of moves by a coterie of right-wing backbenchers to construct an alternative tax reform package containing no changes to negative gearing, which they intend to take directly to Mr Turnbull, bypassing the Treasurer.

"I'm focused on the budget coming up in a few months' time ..." Mr Morrison told reporters.

Asked a second time about the group, he said: "That's your reporting and I'm not going to comment on reporting on someone else's speculation."

Pressed a third time, he said: "I'm not going to respond to media conjecture."

The government's chief parliamentary tactician and Minister for Industry and Innovation, Christopher Pyne, also added to the pre-election fever, telling the Nine network that an election in July would hardly be regarded by voters as early.

A former deputy secretary of the Finance Department and acknowledged expert on public administration and public finance, Stephen Bartos, said passing appropriations ahead of the budget used to be common when commonwealth budgets were handed down in August.

He said this was no longer necessary now that the federal budget was tabled in March - i.e. before the end of the financial year - but confirmed there was no legal or administrative barrier to doing so if it was deemed necessary.